Tax cuts could change graduate funding

If the new GOP tax plan is approved by the Senate and makes its way to President Donald Trump’s desk, graduate students across the nation will feel the strain — even Baylor’s tier one research institutions aspirations could be impeded.

A number of elements in the tax plan could put additional financial burden on universities, Baylor President Dr. Linda Livingstone said. Livingstone said Baylor is monitoring the tax plan closely.

“We’re working closely with our legislatures in Washington, D.C., to help them understand the university perspective on that and hoping that we can actually get some modifications to that plan before it goes through, particularly as it relates to the potential taxing of benefits for graduate students,” she said.

Livingstone said she believes graduate students and their research are an essential part of the university community. Livingstone and Interim Provost Dr. Michael McLendon have been working extensively on their “Strong-Secure-Strategic” academic strategic plan, which encapsulates Baylor’s aspirations to become a pre-eminent Christian research university.

“We have wonderful relationships with our legislative representatives in Washington, D.C., and they’re listening. We hope that we can make some progress on these issues so that there’s not more financial burden on higher education that limits our ability to really support our students in the way that we need to,” Livingstone said.

The GOP tax plan provides “much-needed tax relief for hardworking American families,” U.S. Rep. Bill Flores said in a statement after the House passed the Tax Cuts and Jobs Act.

“The Tax Cuts and Jobs Act creates a fairer and simpler tax code, which is focused on helping working-class Americans. It nearly doubles the standard deduction and increases the Child Tax Credit, while also keeping in place the essential tax credits that help families cope with the increasing costs to raise children. We have simplified the tax code so that most American families will be able to file their taxes on the equivalent of a postcard,” Flores said.

While Flores said “the House-passed Tax Cuts and Jobs Act is overwhelmingly positive,” he noted additional provisions remain to be addressed, namely “preserving the way that waived and discounted tuition for graduate students is treated for income tax purposes.”

Flores said he is working with his colleagues in Congress ensure the final version of the bill “provide[s] tax relief for graduate students.”

Of particular concern to graduate students is Section 117(d) of the current tax code that says taxable income does not include qualified tuition reductions. The House version of the Republican tax plan removes Section 117(d), meaning waived tuition would be added to student’s gross income and therefore taxed.

Jeff Strietzel, doctoral candidate and president of Baylor’s Graduate Student Association said GSA has “been staying attuned” to the proposed Tax Cuts and Jobs Act.

“We are concerned about this proposed federal tax bill. It would count tuition waivers received by any graduate student as taxable income. If adopted, it would make graduate education less affordable and thus less accessible to current and future graduate students. Put plainly, it would make graduate education unattainable for hundreds of thousands of Americans,” Strietzel said in an email to the Lariat. “We concur with the American Council on Education’s November 6 Letter concerning the House Tax Reform bill to the Ways and Means Committee, co-signed by 45 other education-related professional organizations: together they assert, “we cannot support H.R. 1 and strongly oppose the proposed changes….This is not in America’s national interest.”

Mesquite senior and accounting major Destiny Smith is currently considering graduate school options and the outcome of the Republican tax plan is of particular concern her.

“As a student who is personally responsible for funding her own college education, the effects that the plan has on education feels like just another obstacle I’m faced with when it comes to paying for college,” Smith said. “To some it may not seem like a lot of money, but as a person who has already racked up a lot of debt for undergrad, every little bit of money that I can get to pay for grad school really does make a difference.”

Smith said the scholarship opportunities provided by graduate accounting programs plays a key role in her decision-making as she will be relying on financial assistance such as tuition waivers.

Speaker of the House Paul Ryan said the ultimate purpose of the Republican tax plan is to simplify the overly complex tax code and reduce people’s taxes. Of all the things Congress can do, Ryan said he believes the tax plan is the action that will “do the most to improve the most people’s lives in this country.”

“We are convinced that comprehensive tax reform, a middle-class tax cut, simplification, making the system better for businesses to stay in America … will get us above three percent economic growth,” Ryan said in an October interview with theSkimm.“We get this economy growing faster, that means more take home pay for people, higher living standards, more jobs, a more confident country.”

While Ryan expressed optimism for the plan’s effects, other legislators expressed concern about the 450-page tax bill.

Sen. Mark Warner, D-Virginia, told The Wall Street Journal he believes the U.S. needs tax reform but disagrees with the way things are taking place. Warner said he believes tax-code reform needs to be “forward-leaning,” referring to worker-training programs that ensure corporate tax benefits “will at least flow through to some of the workforce.”

Sen. Amy Klobuchar, D-Minn., agrees with Ryan that the tax plan needs to be simplified, however she said her issue is with the added $1.5 trillion debt.

“I wish, when the president had gotten elected, that he had worked with Sen. Chuck Schumer —who wanted to do something about the overseas money — and tied it in with infrastructure, which had always been our plan, and then combined that with things that could truly help the middle class, which would include a minimum-wage increase that we haven’t seen for years, doing something about the student-loan refinancing,” Klobuchar said.

According to Klobuchar, there were a number of options, but she said she believes “we are where we are” due to increasing divisiveness.

Tuesday morning President Donald Trump tweeted: “The Tax Cut Bill is coming along very well, great support. With just a few changes, some mathematical, the middle class and job producers can get even more in actual dollars and savings and the pass through provision becomes simpler and really works well!”